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Indirect Patent Infringement Can Be Based on Willful Blindness and Circumstantial Evidence

In a case remanded by the Supreme Court of the United States “for further consideration in light of Commil” (IP Update, Vol. 18, No. 6), the US Court of Appeals for the Federal Circuit reinstated its prior decision of indirect infringement in all respects. Warsaw Orthopedic, Inc., et al. v. NuVasive, Inc., Case Nos. 13-1576; -1577 (Fed. Cir., June 3, 2016) (Dyk, J) (Warsaw II). The Federal Circuit found that Commil did not change the earlier affirmance of indirect infringement based on willful blindness, because the Supreme Court, in Commil, did not change the standards for indirect infringement from its earlier decision in Global-Tech (IP Update, Vol. 14, No. 6).

The Federal Circuit’s vacated earlier decision (Warsaw I) started as a patent infringement suit by Warsaw Orthopedic and a related company, Medtronic Sofamor (MSD), against NuVasive. NuVasive counterclaimed for infringement of its patent that relates to a method for detecting the presence of, and measuring distance to, a nerve during surgery.

In Warsaw II, the Federal Circuit decided that only its prior decision regarding the NuVasive patent was affected by the Supreme Court’s remand. That aspect of the decision related to the Federal Circuit’s earlier affirmance of a jury verdict of direct infringement of the NuVasive patent by users of MSD’s “NIM-Eclipse” products and induced infringement by MSD. Warsaw I at 1369, 1373, 1379.

After vacatur and remand by the Supreme Court, the Federal Circuit reopened the case for supplemental briefing on “the question of what action this court should take on remand from the Supreme Court ‘for further consideration in light of Commil . . . .’” In its decision on remand, the Federal Circuit, with Judge Dyk writing for the panel, stated that “[t]he only question here is whether there was substantial evidence for the jury to conclude that MSD induced infringement of NuVasive’s . . . patent.” The Federal Circuit then emphasized that the Supreme Court’s decision in Commil “reaffirmed and clarified” the Supreme Court’s earlier decision on the standard for inducement under § 271(b) in Global-Tech but did not change the law.

The Federal Circuit stated that Commil, like the Supreme Court’s prior decision in Global-Tech, held that proof of induced infringement requires not “only knowledge of the patent” but also “proof the defendant knew the [induced] acts were infringing.” The Federal Circuit reasoned that Commil, in reaffirmingGlobal-Tech, “also necessarily reaffirmed that willful blindness can satisfy the knowledge requirement for active inducement under § 271(b) (and for contributory infringement under 271 (c)), even in the absence of actual knowledge.”

Judge Dyk stated that Global-Tech “also held that knowledge of infringement can be inferred from circumstantial evidence,” and that Global-Tech affirmed earlier Supreme Court and Federal Circuit precedents on this issue. He then cited to several Federal Circuit cases that held, e.g., that the “requisite intent to induce infringement may be inferred from all of the circumstances” and that “[w]hile proof of intent is necessary, direct evidence is not required; rather, circumstantial evidence may suffice.”

The Federal Circuit concluded that “there was substantial evidence that MSD’s infringement position was objectively unreasonable and that the jury, based on this evidence, could reasonably have concluded that MSD had knowledge (or was willfully blind to the fact) that it was infringing.”

Practice Note: This case offers two lessons for defending against charges of indirect patent infringement:

Willful blindness can support the intent prong for indirect infringement.

Consistency on claim construction throughout the pre-suit and proceeding may help prevent a finding of willful blindness that supports the intent prong of indirect infringement.

Additional Note: Although the Federal Circuit views Commil as not changing the standards for a finding of indirect infringement set forth in Global-Tech,this case does not address the change in law under Commil—accused indirect infringers can no longer rely on a good faith belief of patent invalidity to avoid the intent requirement of indirect infringement after Commil.

Compare jurisdictions: Arbitration

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